Although British Gas cut its prices by 7% last week, many experts are advising customers to continue to check they are on the best tariffs. This follows a report issued by Ofgem, the energy market regulator, forecasting energy bills to increase by a staggering 25% over the next ten years.
Ofgem’s shocking report was published last week, and details its findings following a four-month study of the market. It warned households would face ‘unaffordable’ energy bills and even power cuts unless significant investment was made into improving the country’s pipelines and power stations. It said at least £200bn is needed to prevent this from happening, or average households bills would reach the £2,000 mark by 2016.
This paints a bleak picture for the future but, given price cuts have been announced by British Gas and nPower is now a good time to switch energy supplier and save money?
It is a confusing time for customers, given the number of tariffs available and the conflicting opinions about who has the best prices. Should customers also wait to see how other energy suppliers respond?
Confused.com’s head of utilities, Gareth Kloet advised ‘The best strategy is to act to lower utility bills now by going online and reviewing your current tariff. One thing these differing views do show is that it is not easy to predict what energy prices will do in the future.’
Moneysavingexpert are recommending customers take advantage of online tariffs instead, where the energy price war has been rife for months. Here customers will find the most competitive deals on the market, and could secure a tariff around the £900 mark.
If customers were to compare and switch online, they could potentially shave hundreds off their annual bill, however given the current climate where other energy suppliers are likely to follow British Gas’ lead, avoiding cancellation fees and penalties is a must. Customers should look for tariffs which do not tie them in, so they can switch again quickly without being penalized.
The advice is to use a comparison website like Confused.com and check you are on the best deal. Timing is vital when it comes to switching supplier though. For instance, if prices are changing like they are now, it is better to wait until they level out. Otherwise, you could end up with the most expensive supplier.
Energy companies are renowned for following suit, so given British Gas’s price cut the others are expected to do the same soon. The worst time to switch is following the news of a price cut. Keeping an eye on what is happening and regularly comparing your current tariff instead are wise.
Remember there are still savings available if you join an online tariff, but bear in mind you will need to manage your account online, and pay by direct debit. Gas and electricity tariffs also depend on consumption levels, and where you live.
Anne Robinson, from uSwitch.com, said ‘Online energy plans consistently offer the most competitive prices – currently costing around £300 a year less than suppliers’ standard plans. But just 5% or 1.3 million households are on an online energy plan.”
Sources:
http://www.telegraph.co.uk/finance/personalfinance/consumertips/household-bills/7167759/Find-the-best-energy-deal-as-price-war-looms.html
http://www.moneysavingexpert.com/utilities/you-switch-gas-electricity
